There have
been many of the strongest bulls on Wall Street that have changed their minds
on the “Bull” side of the market, just recently.Many of them have been very concerned about
the possibility of continued delays in the “Tax Reform” that is being bandied
about in the House and the Senate.Some
others such as Jim Paulson, Chief Investment Strategist at The Leuthold Group,
just a week ago, was concerned about how most investors are still just looking
over the blue skies and thinking nothing can go wrong.He also was concerned about the Fed
tightening more than most investors anticipated, as well as a flattening out of
the bond market.As the shorter term
bonds have been rising faster than the longer term bonds, the flattening could
turn out to be inverted soon and we all understand that is a precursor to a
recession. The financial stocks that usually rise as rates increase, are now
declining, and that also signals that something is wrong.Paulson is also concerned about the
Republican Agenda slowing down, as the House and Senate go back and forth with
significant delays.

Another extremely respected equity analyst for
Morgan Stanley, Mike Wilson, has recently changed his opinion, after being a
noted bullish economic and equity analyst over the past 8 years.He now expects either a major decline or at
best a bear market pause.He also sees
some of the same problems as Paulson. As stated above, the settlement of the
Tax Reform continues to go back and forth as the Republicans are sprinting to
the finish line in order to get a compromise between the two chambers.This is where the Senate Republicans and
Senate Democrats have to give something up to get the approval of the Senate
Committee first, and then the Full Senate, before this year ends.So it is crunch time for Republicans as the
House Ways and Means Committee enters its final days of hammering out its
tax-cut legislation, while a Senate panel has now revealed its own
version.If they don’t get this worked
out, the stock market will have a very difficult time throughout the last
couple of months in 2017 and all of 2018. Right now they don’t seem to be
working out a compromise.

A
commentator on CNBC, Mike Santolli, discussed how much the market volatility
came to a screeching halt during the wild year of the Trump victory.Most investors would have to think of this
being a strong positive for the markets.However, according to Santolli, he has gone back for years to show what
happens to equity markets after going through long periods of very low
volatility-- they are set up to decline significantly.In fact, the S&P 500 just broke a record
today, 11/9/17, by going through the longest streak in history of 370 days without
a 3% decline.Santolli showed that this
is not a good streak, and once it breaks, it could turn into a bad bear
market.

There are
other Republicans like, Douglas Holtz-Eakin, who in 2003 became the director of
the Congressional Budget Office.He is
still very sympathetic to the congressmen that are concerned about the
increases in the debt and deficits.In
fact, the budget office undertook a study of tax rates, and found that any tax
cuts enacted, that increased the debt and deficits of the U.S., will not
generate much growth over the next 10 years.In fact, the Senate minority leader, Mitch McConnell, appointed
Holtz-Eakin to the Financial Crisis Inquiry Commission in 2009, so we are not
talking about a novice in this area.Holtz-Eakin also has a major concern about some of the entitlements that
no one seems to bring up during the Tax Reform discussions.He believes our Social Security entitlements
will come back to haunt us, unless we work on them as soon as possible.Also, he is concerned about the fact that the
global debt is three times the global GDP.

So, as you
can see, it looks like we will have plenty of things to worry about for the
rest of this year, 2018, and beyond.